Correlation Between China National and XCMG Construction
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By analyzing existing cross correlation between China National Software and XCMG Construction Machinery, you can compare the effects of market volatilities on China National and XCMG Construction and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in China National with a short position of XCMG Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of China National and XCMG Construction.
Diversification Opportunities for China National and XCMG Construction
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and XCMG is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding China National Software and XCMG Construction Machinery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on XCMG Construction and China National is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on China National Software are associated (or correlated) with XCMG Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of XCMG Construction has no effect on the direction of China National i.e., China National and XCMG Construction go up and down completely randomly.
Pair Corralation between China National and XCMG Construction
Assuming the 90 days trading horizon China National Software is expected to generate 2.08 times more return on investment than XCMG Construction. However, China National is 2.08 times more volatile than XCMG Construction Machinery. It trades about 0.05 of its potential returns per unit of risk. XCMG Construction Machinery is currently generating about 0.02 per unit of risk. If you would invest 4,117 in China National Software on October 24, 2024 and sell it today you would earn a total of 368.00 from holding China National Software or generate 8.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
China National Software vs. XCMG Construction Machinery
Performance |
| Timeline |
| China National Software |
| XCMG Construction |
China National and XCMG Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China National and XCMG Construction
The main advantage of trading using opposite China National and XCMG Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China National position performs unexpectedly, XCMG Construction can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in XCMG Construction will offset losses from the drop in XCMG Construction's long position.| China National vs. Jiangsu Jinling Sports | China National vs. Songz Automobile Air | China National vs. BTG Hotels Group | China National vs. Runjian Communication Co |
| XCMG Construction vs. China National Software | XCMG Construction vs. Xiamen Goldenhome Co | XCMG Construction vs. Nanjing OLO Home | XCMG Construction vs. Shanghai Newtouch Software |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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